The political calculus of congestion pricing
The political feasibility of using prices to mitigate congestion depends on who receives the toll revenue. We argue that congestion pricing on freeways will have the greatest chance of political success if the revenue is distributed to cities, and particularly to cities through which the freeways pass. In contrast to a number of previous proposals, we argue that cities are stronger claimants for the revenue than either individual drivers or regional authorities. We draw on theory from behavioral economics and political science to explain our proposal, and illustrate it with data from several metropolitan areas. In Los Angeles, where potential congestion toll revenues are estimated to be almost $5 billion a year, distributing toll revenues to cities with freeways could be politically effective and highly progressive.
|Date of creation:||01 Jan 2007|
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Elsevier, vol. 13(2), pages 162-172, March.
- Hutlkrantz, Lars & Armelius, Hanna, 2005. "The Politico-Economic Link Between Public Transport And Road Pricing: An Ex-Ante Study Of The Stockholm Road-Pricing Trial," Working Papers 2005:8, Örebro University, School of Business.
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- Molly D. Castelazo & Thomas A. Garrett, 2004. "Light rail: boon or boondoggle?," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jul, pages 12-13.
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